Sustainable Development:

1
You cannot solve the problem with the same
thinking that created the problem Albert
Einstein
Sustainable Development Thinking Outside the Box
Dr. John Shilling Chairman Board of
TrusteesMillennium InstituteMay 16, 2012
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Foundation of Development

• Both the economy and society depend on the
  environment to function and survive
• The economy also depends on the society to
  progress
• The economy sits on top and can only function if
  its foundations remains solid over the long term

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Conventional Wisdom

• GDP and GDP/capita growth are the main targets
• Free Trade assures security
• Achieving the MDGs results from more growth
• Environmental Impact Assessments are sufficient
  to protect the environment

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Conventional Assumptions

• No limits to economic growth
• It depends on population growth
• Resources are always available
• Or technology will produce alternatives
• Short term targets are best considered as they
  will accumulate over time
• Externalities, public goods, and the commons do
  not affect GDP so are not important

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Questions About Them

• Consider exponential growth over the longer term
• Consider limited stocks of resources
• Consider the effects of externalities, including
  climate change and volatility
• Consider the importance of public goods and the
  commons

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The Risk of Staying in the Box

• Ignoring effects beyond ones sector of interest
• Predictions by sector specialists more often
  wrong than expected
• Hard to reach agreement with other special
  interests
• Dont take account of critical limitations
• These pose a risk to sustainable development
• Our global footprint rose from 1 in 1975 to 1.5
  now and will be more than 2 by 2050

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How MI Got Out of the Box

• Global 2000 Report in 1980 by US Gov.
• International interest, but not national
• MIs founder, Jerry Barney, sought more
  integrated modeling tools to have a more
  consistent approach
• Discovered System Dynamics and created the
  Threshold 21 model

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Conventional Models in the Box

• Accounting models
• RMSM X and IMF
• Mostly exogenous assumptions to check balances in
  the short term
• Computable Equilibrium Models
• Basic ones, up to MAMS
• Start with comparative statics, do little to
  describe transition process, take little account
  beyond the economy, mostly short term

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The SD Approach in T21

• Based on real world causal relations
• Includes economic, social, and environmental
  dimensions
• Takes account of relations within and across
  sectors and dimensions
• Generates long term scenarios to take account of
  lags and see what is likely to happen over time
• Compares the results of different policies and
  assumptions going forward

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Why Take a Systemic View?
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We Need to be Careful
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To Avoid Unexpected Results!
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Factors to Take into Account

• Economic and social factors
• Impacts of depletion of resources forests,
  fish, minerals
• Impacts of waste and pollution
• Food and Energy Security
• Health and education factors
• Public Goods and the Commons
• Climate change impacts and clean air
• Ecosystem protection, Water management, etc.
• Resource access for poor
• Positive and negative feedbacks
• Assuring wellbeing of humans and bio-systems
• Keeping track of all these factors over the long
  term to maintain the security of our life styles
  for our posterity

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To Address Challenges

• Understand real relations in the situations we
  face, within and beyond sector-specific focus
• Incorporate interactions and feedback loops
  across different sectors into models
• Take account of longer term effects and lags of
  different impacts coming into play
• Make sure depletion of natural capital
  contributes to investment in human and physical
  capital
• Examine the results of different assumptions,
  investments, and policies to make better decisions

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A Systemic Approach Works

• We need to deal with systemic issues
• Economic activities affect society and the
  environment -- Pollution and GHG leading to
  climate change
• Social activities affect the economy and
  environment -- Migration and deforestation
• Environmental factors affect the economy and
  society -- Soil erosion and heat waves
• A longer time frame is important
• Some beneficial long-term have short term costs
  Watershed management, infrastructure,
  agricultural transformation
• Some short-term benefits reduce sustainability
  deforestation, mineral exploitation
• Integrating sectors provides a more comprehensive
  and beneficial basis for better policies and ROI

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The Threshold 21 Approach

• Composed of three main pillars
• Economic -- SAM, key market balances, and
  production
• Social -- dynamics in population, health,
  HIV/AIDS, education
• Environmental natural resource use, GHG
  emissions, land availability
• Adapted to priority goals and vision for each
  individual country based on its own data,
  structure, and patterns of activity
• Highlights inter-sectoral feedbacks
• Tracks progress on MDGs and other indicators
• Calibrated against history to provide reality
  checks
• Generates multiple medium-to-long-term scenarios
  to compare
• Transparent and easy to use

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The Basic T21 Structure
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The Key Connections in T21
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Key T21 Characteristics

• Adapted to structure and speficif issues of
  country being modeled
• Incorporates other sector models into its
  framework and adds cross sectors links
• While highly complex, it is also quite
  transparent and provides causal tracing
• Building model contributes a lot of understanding
  about countrys structure
• Remains a work in progress
• Provides the basis for inter-ministerial
  cooperation
• Taking account of these relations would help
  achieve better results on the Banks goals

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Critical Issues T21 Addresses

• Climate Change mitigation and adaptation
• Energy and Food security
• Natural resource management
• Conflict and Risk analysis
• Natural disaster management
• Achieving sustainable development and MDGs
• Long term analysis
• Building indigenous support

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Examples of T21 Work

• Bangladesh and education
• Bhutan and expenditure sharing
• Mozambique and health effects of economic
• Ghana and achieving MDGs quicker
• USA and CAFÉ standards
• China and GHG emissions and behavior change
• Jamaica and natural disasters and civil risks
• Assisting UNEP on the Green Economic Report and
  GEO-5
• Dealing with Climate Change in countries like
  Bangladesh, Kenya, Namibia, Indonesia,

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MI Around the World
T 21 Countries
MI Partner
MI Head Office
M 3 Countries
MEG Countries
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Demonstrate Running T21
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How T21 Is Applied

• Build country advisory committee
• Train local team
• Define objectives and policies to be considered,
  including CC and food security
• Develop with the local team and transfer the
  model to them
• Provide continued support for updates and ME

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Thank You for Your Attention

• Questions and comments are welcome
• www.millennium-institute.org
• Jed.shilling_at_verizon.net

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What Partners and Clients Are Saying

• MIs integrated dynamic models have been vital
  for GMs sales forecasts
• Paul Ballew, GM
• MIs long-term, integrated perspective is
  essential
• Pablo Guerrero, World Bank
• MIs T21 analytical tool is essential for
  effective national development strategies
  
  Ed Cain, Carter Center
• Fascinating!
  David Cohen, Counterparts International
• If only we had known such a tool existed.
• Chorus of planning experts from
  11 countries in Southern Africa
• We need to use this tool at the Headquarters, in
  our embassies and help our country partner
  acquire it
• Dutch Ambassador Ton Boon
  von Ochsen
• I want that T 21 planning team in my office
• Président Amadou T Touré, Mali
• It has been my dream since ten years to get the
  the POIJ departments to work togethernow its
  happening with T21 With T21 I can see team
  building and networking across the ministries and
  government agencies and effective communication
• Wesley Hugh, Director Planning
  office Jamaica